Israel Rebuffs Biden’s Request To Release Palestinian Tax Money

Biden had a tense conversation with Israeli Prime Minister Benjamin Netanyahu about the tax issue

Last weekend, President Biden asked the Israeli Prime Minister to release Tel Aviv’s hold on Palestinian tax money. Finance Minister Bezalel Smotrich announced Israel was rejecting the request on Friday. The White House has continued to provide Israel with unconditional support even as Tel Aviv has snubbed several requests from Biden and other senior administration officials.

Barak Ravid reported in Axios on Thursday that Biden and Netanyahu held a “difficult” call the previous weekend. One point of contention was Tel Aviv withholding tax revenues collected from Palestinians, which Israeli authorities collect on behalf of the Palestinian Authority (PA).

“Biden asked Netanyahu to accept a proposal that the Israeli prime minister raised himself several weeks ago: to transfer the withheld tax revenues to Norway for safekeeping until an arrangement can be found that will assuage Israel’s concerns that the funds could reach Hamas,” Ravid reports. “A US official and a source with knowledge of the call said Netanyahu backtracked and said he doesn’t think this is a good idea anymore. He told Biden he doesn’t trust the Norwegians,” Ravid added.

Netanyahu’s about-face angered Biden. “Biden pushed back and said the US trusts Norway’s proposal and this should be enough for Israel to trust it too,” the President said, according to Ravid’s sources. “Biden told Netanyahu that he should face the hardliners in his coalition on this issue like he is dealing with political pressure from Congress about the war in Gaza.”

“After a few minutes of discussion, Biden told Netanyahu he expects him to solve this issue, adding “this conversation is over” and ended the call,” Ravid writes. “The feeling was that the president is going out on a limb for Bibi every day and when Bibi needs to give something back and take some political risk he is unwilling to do it,” one US source told Axios.

Biden is concerned that a financial collapse of the PA will lead to conflict in the West Bank. The White House is also pushing Tel Aviv to allow the PA to govern Gaza after the war ends. However, Netanyahu has explicitly ruled out that possibility.

On Friday, Smotrich, who denies the existence of the Palestinians, posted on X that Tel Aviv was denying Biden’s request. “We have a lot of respect for the USA, our best ally in the world, and for President Biden, who is a true friend of Israel,” he posted on X. “But we will never leave our destiny in the hands of foreigners, and as long as I am the Minister of Finance, not a single shekel will go to the Nazi terrorists in Gaza.”

Since October 7, the White House has made several requests of Tel Aviv, including a reduction of civilian deaths in Gaza, allowing more aid into the besieged enclave, and de-escalation of tensions with Hezbollah. The Israeli government has snubbed the president’s requests. Still, the Biden administration has remained steadfast that it will not condition the $3.8 billion in annual military aid Israel receives on Tel Aviv meeting some of the president’s requests.

Kyle Anzalone is the opinion editor of, news editor of the Libertarian Institute, and co-host of Conflicts of Interest.